Stocks slipped before the bell on Tuesday as investors weighed the early results of a flurry of gains and eyed the prospects of a U.S. breakthrough in the Israel-Hamas conflict.
Dow Jones Industrial Average (^DJI) futures fell 0.2% after closing Monday with gains. Contracts on the S&P 500 (^GSPC) and the tech-heavy Nasdaq 100 (^NDX) lost around 0.3%.
Bank of America (BAC) reported a 10% increase in profits, reflecting the strong performance of its peers last week. Goldman Sachs (GS) is another highlight in Tuesday’s third-quarter reports, with Lockheed Martin (LMT), Johnson & Johnson (JNJ) and United Airlines (UAL) also on the list.
It’s still early in earnings season, but there are already encouraging signs that corporate America could be seeing an end to the recent earnings recession. Tesla (TSLA) and Netflix (NFLX) report their technology sector results on Wednesday, providing more insight into the burden of higher borrowing costs.
Read more: What a Fed pause on rate hikes means for bank accounts, CDs, loans and credit cards
Meanwhile, the Middle East conflict continued to weigh on the market as investors assessed the possibility of a major war breaking out. Rising geopolitical tensions in the Middle East could trigger a global recession, leading investors have warned.
News that President Joe Biden plans to visit Israel on Wednesday and then travel to Jordan has eased some concerns sparked by a looming Israeli ground offensive on Gaza, seen as a red line for its Arab neighbors.
Oil prices stabilized as the U.S. stepped up diplomatic efforts and hopes grew that the U.S. will ease sanctions on producer Venezuela. Crude oil futures (CL=F) remained above $86 a barrel, while Brent crude oil futures (BZ=F) traded near $90 a barrel.
In an otherwise quiet week for economic data, the September retail sales report is expected to show modest growth when it is released on Tuesday. Recent indicators have encouraged the market to bet that the Federal Reserve will not raise interest rates at its November meeting.
JThere was no sign of a slowdown in consumption in September
The American consumer continues to surprise Wall Street.
New Commerce Department data released Monday showed retail sales rose 0.7% in September from the previous month, more than double Wall Street’s estimates for 0.3% growth. Sales excluding autos and gasoline rose 0.6%, above estimates compiled by Bloomberg for a 0.1% increase. Meanwhile, August sales were revised upward to 0.8% from a previously reported rise of 0.6%.
The September report provides a snapshot of consumer spending at a time when economic data was far stronger than expected despite the Federal Reserve’s interest rate hike campaign to cool inflation.
Nine of the 13 categories highlighted in the press release saw increases from the previous month, while sporting goods was the only category that remained unchanged from August. Sales at multi-store retailers led all categories, increasing 3% from August. Sales at non-store retailers rose 1.1%, while sales at auto and parts retailers were the other top performer, up 1% from September.
The biggest laggards were electronics and appliance stores and clothing sales, both of which fell 0.8% from the previous month.
Read more here.
BofA, Lockheed and Wyndham: Stock trends in premarket trading
Here are some of the stocks leading Yahoo Finance’s trending ticker page in premarket trading on Tuesday:
Bank of America Corporation (BAC): Bank of America shares rose over 1% premarket. The second-largest U.S. bank posted a 10% rise in profits after benefiting from higher interest income and strong performance from its Wall Street division, Yahoo Finance’s David Hollerith reported.
Lockheed Martin (LMT): Shares fell over 1% in premarket trading on Tuesday. The company reported higher third-quarter sales on Tuesday as geopolitical tensions boosted demand for its military equipment.
Wyndham (WH): Wyndham shares rose 12%. Choice Hotels said Tuesday that it has offered to buy Wyndham Hotels in a potential deal worth nearly $10 billion.
Ericsson (ERIC): Shares fell over 4% after the company reported weak earnings and said it expected uncertainty impacting its wireless business to continue into 2024.
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Stock futures fall as earnings season gathers pace
Key stock indicators on Wall Street pointed to a decline on Tuesday as reports from Bank of America and Johnson & Johnson started the week’s earnings stream.
Dow Jones Industrial Average futures (^DJI) lost 0.18%, or 61 points, while S&P 500 futures (^GSPC) lost 0.23%. Contracts on the tech-heavy Nasdaq 100 (^NDX) were 0.27% lower.
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